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27.11.2011 Business & Finance

AT&T and T-Mobile USA withdraw merger application

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US telecoms giant AT&T and Deutsche Telekom have cast doubt over the $39bn (£25bn) sale of T-Mobile USA by withdrawing their merger application to the industry regulator.

AT&T also said it would include a $4bn charge in its fourth-quarter accounts to cover any potential compensation due if the deal does not go ahead.

The US Justice Department moved to block the sale at the end of August.

The two firms said they would focus on clearing the deal with the government.

Seeking approval
AT&T agreed to buy T-Mobile USA from Deutsche Telekom in March, aiming to create the largest US wireless network.

However, the government has said the merger would lead to higher prices and restrict choice, and has requested a court order to block it.

As a result, the two firms have withdrawn their application with the Federal Communications Commission (FCC).

This would allow them to "focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice", the companies said.

They would then focus on seeking approval from the FCC, they added.

The deal needs the approval of both the Justice Department and the FCC to go ahead.

AT&T's bid to buy T-Mobile would give the US telecoms firm about 43% of the US mobile phone market.

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